CPS Head of Economic Research Ryan Bourne spoke to e-gov monitor about French President Nicolas Sarkozy's gamble to impose a Financial Transaction Tax in his pursuit of re-election in the face of difficult polling.
"Bourne told eGov Monitor today that Sarkozy’s gamble is a clear “reflection of the political pressure he is under from his socialist opponent in his race for President”. This statement is backed up by the fact that Sarkozy is supposedly rushing the measures through parliament before the presidential vote. He is currently behind his rival, Francois Hollande, in the opinion polls
Bourne pointed out that the tax is politically popular in France at a time when banks are not, and that he will be “praying that other EU countries follow suit”. As for what this means for Britain, he compared the situation to when Sweden adopted the same “disastrous experiment”. He said, “More French transactions will take place in the UK”.
In all, it is a very chancy move from Sarkozy with not a huge amount to be won for him. He could be seen as the first European leader to implement a ‘Tobin tax’ and it may or may not win him the French election. At the same time he could isolate France and force French industries out of the country, possibly into the open arms of the City across the Channel. Sarkozy has rolled his dice; we must now wait to see if it comes up snake eyes."
To read the full article, visit the e-gov monitor website.